Songbird’s capitulation to the £2.6bn Qatari-led bid yesterday must be tough to take for a management team that was convinced it would fend the unwelcome bidders off.
It was so certain of victory it declared the bid “dead” just days after the final 350p a share offer from the Qatar Investment Authority (QIA) and Brookfield Property Partners arrived in early December.
If ever there were a defeat snatched from the jaws of victory, this was it. Songbird’s confidence bordered on arrogance in the view of some. In mid December, it was utterly secure in the knowledge that it had the backing of its major shareholders - China Investment Corporation, Simon Glick and Morgan Stanley.
As it turned out, all three flipped, not least because CIC was somewhat bemused by Songbird’s presumptuousness.
That Sir George Iacobescu is going to keep his job, along with the rest of the management, is a positive sign. Now is the time for conciliation. After all, there’s still a huge property company to run, and a massive pipeline of development to deliver.
However, quite how long Sir George, for whom I have a great deal of admiration, will hang around depends on how far he wants to work into his 70s. He celebrates his three score years and ten in November.
So why was 350p enough for CIC, Glick and Morgan Stanley after Songbird told us the shares were worth north of 400p? The answer to this is simple.
None of them are calling the top of the UK office property market. Neither are they particularly overjoyed with the £2.6bn valuation. All they want is some cash back after being locked into Canary Wharf for the best part of a decade.
With billions of pounds worth of investment required to deliver the development pipeline, they’d had enough of waiting for a return. After no dividend payment for five years, there was little prospect of one to come. Indeed, one Canary Wharf insider confirmed to me a couple of weeks back there would certainly not be a dividend this year.
So instead of a dividend the shareholders will get all their money back if they want it. And while Brookfield is a junior partner in the winning bid, don’t be surprised if it also bails out and sells its 22% in Canary Wharf Group to the Qataris. After all, it was as frustrated as anyone else with the liquidity issues around its investment.
For now though, expect smiles and handshakes. War is over. Give peace a chance. For just a little while at least.
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